Insurtech startup Upcover has raised $2.7 million in a Seed funding alongside $2 million in debt as it looks to transform the small business insurance sector.
The round was backed by venture funds Antler Australia – Upcover was part of its inaugural accelerator program in 2019 – and Betterlabs, as well as a range of industry execs including Colin Morgan, the former Zurich Insurance Global Life CEO for APAC, Patricia Priest, GM of QBE LMI (Lenders’ Mortgage Insurance), Raf Uy, CFO of global fintech Etika, and Raf Niesten, CEO of Bricks + Agent.
Cofounded by Skye Theodorou and Anish Sinha, upcover launched its API-based embedded SMB insurance platform in 2021.
The insurance tech platform partners with insurers to offer quick, jargon-free insurance tailored to the needs of SMBs and sole traders. A single insurance API connects with insurers to provide quotes by asking just two questions.
As well as offering insurance directly through its website, upcover’s embedded insurance offering integrates with online businesses such as rideshare companies, online marketplaces, and fintechs for companies to monetise their existing customer base and independent contractor workforce.
More than 5,000 small businesses, sole traders and independent contractors are registered on the upcover platform. Since launching eight months ago, revenue has grown 20% month-on-month and the business has introduced four new insurance products.
The funds will be used for product development and customer acquisition.
After working for over a decade in the insurance industry, Skye Theodorou could see how much the sector needed a tech shake-up.
“The journey of building upcover has been an incredible ride. With the platform live, and our customers loving the experience we offer, we know we are onto something unique,” she said.
“To be backed by some of the best in the insurance and banking business has been an incredible way to close out our seed fundraise. The insurance industry has long been plagued by convoluted questionnaires, overcomplicated terms, and lengthy quote timeframes and upcover is changing all of this.”
Her cofounder, Anish Sinha, said the local SMB insurance market is worth around $10 billion with four incumbents controlling 80% of it.
“Upcover is democratising the ecosystem by allowing any business, brand or online marketplace to become distributors of insurance policies and in the process allowing them to monetise their customer base,” he said.
“By making insurance policies programmatically accessible, we’ve opened up the ecosystem, so developers and/or brands can embed an insurance checkout within their brands user experience.”
Betterlabs CEO James Edwards said it was their first investment in the insurtech space.
“The calibre of the founding team, their innovative business model and traction they have gained in the market to date present a fantastic opportunity. We are very excited to now journey with them as they scale their business off the back of their recent seed round,” he s
It was Patricia Priest’s very first startup investment at QBE and she was pleased to be backing a female founder.
“Coming from a background in financial services, it’s inspiring to see the new ideas and fresh thinking that upcover is bringing to the table,” she said
Antler Managing Partner Bede Moore said: “Upcover is led by an exceptional founding team and we have been an enduring supporter since their very first round. We believe they are building towards a huge insurtech opportunity.
Upcover’s range of insurance products include Professional Indemnity, Public and Products Liability, Cyber Privacy Liability, COVID-19 Bounceback insurance and Commercial Motor (incl. rideshare and delivery), with Tools of Trade, Glass, Personal Accident and Management Liability all coming later this year.